Does a contract have to be notarized to be valid?

Recently on our legal forum a user asked, “My friend and I had an agreement that he would give me $150 and I would give him a dog. I gave him the dog, but he did not pay me. We wrote the agreement down, but we did not get it notarized. Does the contract have to be notarized to be legally valid?”

What is a contract?

You and your friend have a legal contract if three elements exist. First, were all parties in agreement at the time the offer was made? Second, was something of value exchanged such as a good or service for something else of value? Finally, were both parties legally capable of entering into the contract?

Let’s take a closer look at your example. To satisfy the first condition you and your friend would need to agree on the terms of the offer, which it sounds like you did. You said you would give him a dog and he said he would give you $150.

Now to the second issue: was something of value exchanged. Something of value is what is generally termed “consideration.” In this case, you and your friend agreed to the terms, there was an exchange of something of value (consideration): you promised to give your friend a dog, and he promised to pay you $150.

Finally, were both you and your friend were capable of entering into a contract? Generally, this requirement is easy to meet if neither of you were minors at the time the contract was initiated and you both were of sound legal mind.

Do valid contracts have to be in writing?

You didn’t ask whether the contract had to be in writing. In fact, you were actually wise enough to get the contract in writing. You specifically asked whether a written contract had to be notarized.

The good news is that forming a contract is actually much simpler than you might imagine. Not only do you not have to have a contract notarized to be valid, many contracts do not even have to be in writing. Exceptions can exist, however, for contracts which involve real estate transactions or agreements that will last more than one year.

By making sure you got your contract in writing, however, it is much easy to prove that a valid contract existed.

How do I enforce a contract?

To enforce a contract, you have several options. First, you should talk to your friend. If you have the written agreement the two of you made you need to bring this with you and show it to him. Remind him of his promise to pay you $150 for the dog.

If a reminder does not work, the next step is to send a demand letter. A demand letter should clearly outline the contractual agreement, the amount you expect for him to pay, the date you expect payment, and the repercussions if he does not pay.

If none of the above options work, you have a choice. You can either pursue payment through small claims court or you can simply walk away from the money. Given the amount of the payment and the hassle of taking your friend to court simply walking away and looking at the dog as a gift to your friend might be the best option.

What will happen if we go to court?

If you do decide to pursue the case it’s likely, given the information you provided, that you could win your case. There are reasons, however, that a court could rule against you. In fact, a court may void a contract for any of the following reasons:

• One party did not have the capacity to contract
• One party used duress, misrepresentation or undue influence to the other party to sign the contract
• The court determines the bargain was excessively unfair
• The contract violated the law or public policy
• The parties made a mistake related the contract which had a material effect upon the agreed exchange

Bottom line:

The question of whether or not you and your friend have a valid contract is probably less difficult to prove than whether or not it’s worth the effort for you to enforce the contract.